Horse flu outbreak ‘to impact economy’

An AAP reports says that it might not quite stop the economy, but if “the race which stops the nation” on November 6 is cancelled, the cost to the country from equine influenza will have run into billions of dollars.

Jobs too will be at risk as the knock-on effects are felt throughout the racing and betting industry, down to the local riding school.

Bookmakers are already reporting millions of lost dollars in turnover after just one weekend of cancelled horse race meetings, and one leading economist says the impact goes beyond just the horse fraternity.

Federal Treasurer Peter Costello says the equine influenza (EI) outbreak will affect the economy.

“Horse racing is a very important industry to Australia when you take into account breeders, trainers, jockeys, race meetings,” Mr Costello told journalists.

“And the fact that we have had this outbreak of horse flu is very serious. It will affect the economy.”

As the crisis deepened on Monday, 51 horses were confirmed with EI in NSW, while in Queensland there was one confirmed and three suspected cases at a World Cup equestrian qualifier event in Warwick.

And it is not just the big horse events that will hurt the economy. “If you do have some regional trotting and thoroughbred meets which are cancelled the owners of the horses don’t get the income in, so then they can’t spread it through the regional community,” Craig James, chief economist at Commonwealth Securities, told AAP.

“It has knock-on effects through a whole range of businesses right the way across Australia.”

It was still unclear how hard the epidemic will hurt horse racing in Australia.

When the UK was hit by foot and mouth disease in 2001, it had a major impact on racing and horse events, and the equine industry alone was estimated to have lost 100 million pounds ($A242 million) per month in March, April and May, according to The Horse.com.

Even if Australia’s brush with EI proves to be short term, the costs could be huge.

Shares in gaming companies Tabcorp Holdings Ltd, Tattersall’s Ltd and Centrebet International Ltd all fell sharply in early trading on Monday after race meetings were cancelled over the weekend.

The cancellation of thoroughbred and harness race meetings over the weekend meant a loss in wagering turnover of $65 million for Tabcorp.

“Based on its experience to date, if Australian racing were not to resume until next weekend, Tabcorp expects that the loss in turnover will be in the order of $150 million,” it said.

Centrebet said if the crisis lasts a month, there would be a negative impact on its fiscal 2008 net profit of about $400,000.

The virus will also hurt the livelihood of at least 60,000 people involved in racing, the Australian Workers’ Union (AWU) says. “It is a clear and present crisis, it’s already a problem, but if it goes for more than a few days it will become an even more serious problem,” AWU national secretary Bill Shorten told AAP.

Mr James said it is difficult to put a figure on the total cost of the epidemic if it does cause the Melbourne Cup to be cancelled. “The Melbourne Cup marks the start of Christmas/New Year’s celebrations,” Mr James said. “Most people see that as really the start of the party season.

“You are moving into a key time of the racing season and it is a time when hotels, clubs, cafes restaurants and even some retail establishments such as clothing establishments rely on at this time of year.”

Report by The Mole